Neither taffy nor caramel, and certainly not nougat or chocolate, Tootsie Roll Industries has its success wrapped in brown-and-white waxed paper. As one of the country's largest candy companies, it makes and sells candies, including the vaguely chocolate-flavored Tootsie Roll, which has been produced with the same formula and name for 120 years. Tootsie Roll Industries also makes such well-known candies as Andes mints, Junior Mints, Charleston Chew, Mason Dots, and Sugar Daddy. Its Charms and Tootsie Pops brands make the company one of the largest lollipop producers in the world. Ellen Gordon controls the company's voting power after the 2015 death of her husband, former chairman and CEO Melvin Gordon.
Every day the company produces some 64 million Tootsie Rolls. The company also makes more than 16 million lollipops a day. Tootsie Roll maintains production plants in the US (4), Mexico City (1), Ontario, Canada (1), and Barcelona, Spain (1). It operates as a single reportable segment that involves the manufacture and sale of confectionery products.
Based in Chicago, Tootsie Roll boasts operations across North America. It taps distribution channels in more than 75 countries. Some 92% if sales in the US with the other 8% originating in Canada, Mexico, and other countries.
Sales and Marketing
The company uses a network of about 30 candy and grocery brokers to distribute its products in North America. Tootsie Roll's candy is sold in a wide variety of venues, including supermarkets, warehouse and membership stores, vending machines, dollar stores, drug stores, the US military, charitable organizations, and convenience stores. In the US, it counts some 4,000 customers. Über retailer Wal-Mart accounted for 24% of the company's 2015 sales.
The company has focused on expanding its digital marketing and social media initiatives in recent years. It's targeting candy-buying mothers age 25 to 44 because this group is considered to be tech-savvy and a prime demographic for Tootsie Roll. In the months leading up to the company's key Halloween selling season, the candy manufacturer rolls out campaigns using a combination of target-specific web sites, specialized Internet ad networks and social media, and search engine and portal ads. Its long-standing "How Many Licks?" Tootsie Pop commercial runs on popular cable TV programs at various times throughout the year and with a particular emphasis on the peak Halloween season.
In 2015 Tootsie Roll's sales slipped $3.4 million to $540 million from 2014. The reduction was directly related to the sale of fewer products in 2015 as well as a stronger US dollar's impact in Mexico and Canada. The high mark for revenue was about $550 million in 2012.
As revenue has slipped in recent years, the company's net income has remained steady. It was $66 million in 2015, up $2.7 million from 2014. The company cut selling, marketing and administrative expenses. The company had internal efforts to reduce costs. Also, some reductions had to do with lower distribution and delivery expenses stemming from declining energy and fuel costs.
Cash from operations was $91 million in 2015, $2.3 million higher than 2014.
Tootsie Roll increasingly relies on information technology to analyze its supply chain as it looks for further cost reductions. It has installed an enterprise resource planning system to provide company wide data.
In 2015 the company brought back Tootsie Fruit Chews and added a companion product, Tootsie Fruit Chew Pops.
The company, which was formed in 1896, has always been secretive about its Tootsie Roll recipe. Succession plans, what might happen after Melvin or Ellen Gordon left the business, have also been secret. But when Melvin Gordon died in early 2015, the board of directors appointed Ellen Gordon chairman and CEO in keeping with what the company said was its existing succession plan.